Water rates refer to the charges that households and businesses pay for their water supply. These rates can vary based on factors such as location, usage, and the type of service provided. Water utilities set these rates to cover the costs of sourcing, treating, and delivering water, as well as maintaining infrastructure. Typically, water rates are structured in tiers, meaning that the more water a customer uses, the higher the rate per gallon or liter. This tiered system encourages conservation by making excessive use more expensive. Local governments or private companies usually manage water services and establish the rates based on operational costs and community needs.